24134 Federal Register / Vol. 70, No.
87 / Friday, May 6, 2005 / Notices
Filing Dates: The application was
filed on February 10, 2005, and
amended on April 7, 2005.
Applicant’s Address: Safeco Mutual
Funds, 4854 154th Pl. NE, Redmond,
WA 98052.
Safeco Common Stock Trust [File No.
811–6167]
Summary: Applicant seeks an order
declaring that it has ceased to be an
investment company. On December 10,
2004, applicant transferred its assets to
corresponding series of Pioneer Value
Fund, Pioneer Fund, Pioneer Growth
Shares, Pioneer Mid Cap Value Fund,
Pioneer Small Cap Value Fund, Pioneer
Series Trust II, Pioneer Balanced Fund
and Pioneer International Equity Fund,
based on net asset value. Expenses of
$781,076 incurred in connection with
the reorganization were paid by Symetra
Financial Corporation, the parent of
Symetra Asset Management, applicant’s
former investment adviser, and Pioneer
Investment Management, Inc.,
applicant’s investment adviser.
Filing Dates: The application was
filed on February 10, 2005, and
amended on April 7, 2005.
Applicant’s Address: Safeco Mutual
Funds, 4854 154th Pl. NE, Redmond,
WA 98052.
Safeco Money Market Trust [File No.
811–3347]
Summary: Applicant seeks an order
declaring that it has ceased to be an
investment company. On December 10,
2004, applicant transferred its assets to
corresponding series of Pioneer Money
Market Trust and Pioneer Series Trust
II, based on net asset value. Expenses of
$105,315 incurred in connection with
the reorganization were paid by Symetra
Financial Corporation, the parent
company of Symetra Asset Management
Company, applicant’s former
investment adviser, and Pioneer
Investment Management, Inc.,
applicant’s investment adviser.
Filing Dates: The application was
filed on February 10, 2005, and
amended on April 7, 2005.
Applicant’s Address: Safeco Mutual
Funds, 4854 154th Pl. NE, Redmond,
WA 98052.
Oppenheimer Europe Fund [File No.
811–9097]
Summary: Applicant seeks an order
declaring that it has ceased to be an
investment company. On October 17,
2003, applicant transferred its assets to
Oppenheimer Global Fund, based on net
asset value. Expenses of $30,295
incurred in connection with the
reorganization were paid by applicant.
VerDate jul<14>2003 18:03 May 05, 2005 Jkt 205001
Filing Dates: The application was
filed on September 7, 2004, and
amended on March 28, 2005.
Applicant’s Address: 6803 South
Tucson Way, Centennial, CO 80112.
Oppenheimer World Bond Fund [File
No. 811–5670]
Summary: Applicant seeks an order
declaring that it has ceased to be an
investment company. On February 16,
2001, applicant transferred its assets to
Oppenheimer International Bond Fund,
based on net asset value. Less than
$60,200 in expenses were incurred in
connection with the reorganization and
were paid by applicant.
Filing Dates: The application was
filed on August 9, 2002, and amended
on April 18, 2005.
Applicant’s Address:
OppenheimerFunds, Inc., 6803 South
Tucson Way, Englewood, CO 80112.
Smith Barney Shearson
Telecommunications Trust [File No.
811–3766]
Summary: Applicant seeks an order
declaring that it has ceased to be an
investment company. On March 12,
2004, applicant made a liquidating
distribution to its shareholders, based
on net asset value. Expenses of $70,489
incurred in connection with the
liquidation were paid by Smith Barney
Fund Management LLC, applicant’s
investment adviser. Applicant has paid
$450 in accounting expenses incurred in
connection with the liquidation and has
retained $13,766 in cash, which is being
held by applicant’s custodian, State
Street Bank & Trust Co., to cover
additional outstanding liabilities.
Filing Dates: The application was
filed on July 28, 2004, and amended on
April 7, 2005.
Applicant’s Address: 125 Broad St.,
New York, NY 10004.
Protective Investment Company [File
No. 811–8674]
Summary: Applicant seeks an order
declaring that is has ceased to be an
investment company. On December 19,
2003, pursuant to a Plan and Agreement
of Reorganization, all of the assets of the
following portfolios of the applicant,
Protective CORESM U.S. Equity Fund,
Protective Capital Growth Fund,
Protective Small Cap Value Fund,
Protective International Equity Fund,
and Protective Growth and Income
Fund were acquired and substantially
all of the liabilities were assumed, by
certain investment portfolios of the
Goldman Sachs Variable Insurance
Trust (‘‘GSVIT’’). On December 19,
2003, pursuant to a Plan of Liquidation
the assets of the Protective Global
PO 00000 Frm 00174 Fmt 4703 Sfmt 4703 E:\FR\FM\06MYN1.SGM
Income Fund were liquidated and the
proceeds from such liquidation were
distributed to shareholders of that
portfolio. Expenses of approximately
$1,068,007.39 were incurred in
connection with the reorganization and
liquidation. All counsel fees and legal
expenses incurred in connection with
the plan of reorganization were paid by
Protective Investment Advisors, Inc.
(‘‘PIA’’) and all other fees and expenses
were shared by PIA and Goldman Sachs
Asset Management, L.P., the investment
adviser to GSVIT.
Filing Date: January 5, 2005.
Applicant’s Address: 2801 Highway
280 South, Birmingham, Alabama
35223.
For the Commission, by the Division of
Investment Management, pursuant to
delegated authority.
J. Lynn Taylor,
Assistant Secretary.
[FR Doc. E5–2202 Filed 5–5–05; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 35–27964; International Series
Release No. 1286]
Filings Under the Public Utility Holding
Company Act of 1935, as Amended
(‘‘Act’’)
April 29, 2005.
Notice is hereby given that the
following filing(s) has/have been made
with the Commission pursuant to
provisions of the Act and rules
promulgated under the Act. All
interested persons are referred to the
application(s) and/or declaration(s) for
complete statements of the proposed
transaction(s) summarized below. The
application(s) and/or declaration(s) and
any amendment(s) is/are available for
public inspection through the
Commission’s Branch of Public
Reference.
Interested persons wishing to
comment or request a hearing on the
application(s) and/or declaration(s)
should submit their views in writing by
May 24, 2005, to the Secretary,
Securities and Exchange Commission,
Washington, DC 20549–0609, and serve
a copy on the relevant applicant(s) and/
or declarant(s) at the address(es)
specified below. Proof of service (by
affidavit or, in the case of an attorney at
law, by certificate) should be filed with
the request. Any request for hearing
should identify specifically the issues of
facts or law that are disputed. A person
who so requests will be notified of any
hearing, if ordered, and will receive a
06MYN1
 Federal Register / Vol. 70, No. 87 / Friday, May 6, 2005 / Notices
copy of any notice or order issued in the
matter. After May 24, 2005 the
application(s) and/or declaration(s), as
filed or as amended, may be granted
and/or permitted to become effective.
Wisconsin Electric Power Company
(70–10110)
Wisconsin Electric Power Company
(‘‘Wisconsin Electric’’) a Wisconsin
corporation and a 3(a)(1) exempt
holding company, 231 West Michigan
Street Milwaukee, WI 53201, has filed
an application (‘‘Application’’) with the
Commission under sections 3(a)(1),
9(a)(2) and 10 of the Act.
Wisconsin Electric requests approval
under sections 9(a)(2) and 10 in
connection with Wisconsin Electric’s
lease and operation of the electric
generation facilities owned by Port
Washington Generating Station, LLC
(‘‘Project Company’’) which are
currently under construction. When its
generating and interconnection facilities
become operational, Project Company
will be an electric utility company
under the Act. Wisconsin Electric also
requests an exemption by order under
section 3(a)(1) from all of the provisions
of the Act other than section 9(a)(2) of
the Act.
I. Description of the Parties
A. Wisconsin Electric
Wisconsin Electric is a wholly owned
combined electric and gas utility
company subsidiary of Wisconsin
Energy Corporation (‘‘WEC’’). WEC is a
public utility holding company exempt
by order under section 3(a)(1) of the Act
under the 2000 Order. Wisconsin
Electric currently claims an exemption
under section 3(a)(1) of the Act by filing
under rule 2. As a result of acquiring
interests in two public utility
companies, and the lease of Project
Company’s assets, Wisconsin Electric
itself is a holding company as defined
by section 2(a)(7) of the Act. Wisconsin
Electric presently owns an interest in
two public utility subsidiaries,
American Transmission Company, LLC
(‘‘ATC’’) and ATC Management Inc.
(‘‘ATC Management’’).1 Wisconsin
Electric generates, distributes and sells
electric energy at retail and wholesale in
Wisconsin and the upper peninsula of
Michigan.2 Wisconsin Electric also
1 See HCAR No. 27329 (December 28, 2000)
(‘‘2000 Order’’).
2 Wisconsin Electric is subject to regulation by a
number of regulatory bodies including the Federal
Energy Regulatory Commission (‘‘FERC’’) under the
Federal Power Act’s authority to regulate wholesale
sales of electric power, accounting and certain other
matters. Wisconsin Electric’s hydroelectric facilities
are also regulated by FERC. Wisconsin Electric is
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purchases, distributes and sells natural
gas to retail customers and transports
customer owned gas in Wisconsin. As of
December 31, 2004, Wisconsin Electric
had 1,081,400 electric retail customers
and 437,800 gas retail customers.
Wisconsin Electric states that all of its
generating plants are located in
Wisconsin, except the Presque Isle plant
and 12 small hydro plants which are
located in the upper peninsula of
Michigan. As of December 31, 2004,
Wisconsin Electric operated
approximately 21,900 pole-miles of
overhead distribution lines and 20,400
miles of underground distribution cable
as well as approximately 352
distribution substations and 267,700
line transformers.
As of December 31, 2004, Wisconsin
Electric’s gas distribution system
included approximately 8,983 miles of
mains connected at 22 gate stations to
the pipeline transmission systems of
ANR Pipeline Company, Guardian
Pipeline, L.L.C., Natural Gas Pipeline
Company of America, Northern Natural
Pipeline Company and Great Lakes
Transmission Company. Wisconsin
Electric has a liquefied natural gas
storage plant which converts and stores
in liquefied form natural gas received
during periods of low consumption. The
liquefied natural gas storage plant has a
send-out capability of 70,000
dekatherms per day. Wisconsin Electric
also has propane air systems for peaking
purposes. These propane air systems
will provide approximately 2,000
dekatherms per day of supply to the
system.
Wisconsin Electric operates two
district steam systems that supply steam
for space heating and process uses.
These systems are located in Milwaukee
and in Wauwatosa, Wisconsin and are
subject to regulation by the PSCW.
B. ATC
ATC is a Wisconsin limited liability
company and electric public utility
company which was formed to own all
electric transmission facilities in
Wisconsin, as well as certain very
limited transmission facilities located in
northern Illinois and the upper
peninsula of Michigan.3 As of February
2004, ATC owned a total of 8,776 miles
of transmission lines, 6,882 miles of
which are located in Wisconsin, 1,884
miles of which are located in the upper
peninsula of Michigan and 12 miles of
which are located in Illinois.4
also subject to regulation by the Public Service
Commission of Wisconsin (‘‘PSCW’’).
3 Id.
4 Wisconsin Electric states that a small number of
miles of transmission lines are under construction
by ATC in Minnesota.
Frm 00175 Fmt 4703 Sfmt 4703 E:\FR\FM\06MYN1.SGM
24135
Wisconsin Electric states that it
currently holds a 33.2% ownership
interest in ATC as of December 31,
2004. Additionally, as of December 31,
2004, Edison Sault owns a 4.6%
ownership interest in ATC.
C. ATC Management Inc.
ATC Management, a Wisconsin
corporation, is the manager of ATC and
as of December 31, 2004, has a nominal
membership interest (a one/one
millionth share) in ATC. Wisconsin
Electric states that as of December 31,
2004, it held a 37.8% ownership interest
in ATC Management.
II. Project Company Lease
W.E. Power, LLC (‘‘W.E. Power’’) is a
Wisconsin limited liability company
that is a wholly owned, direct
subsidiary of Wisconsin Energy. Project
Company, a Wisconsin limited liability
company which is a wholly-owned
subsidiary of W.E. Power, was formed
specifically to develop, construct, and
own a 100% interest in two 545
megawatt gas fired, combined cycle
generating units located at Wisconsin
Electric’s existing Port Washington,
Wisconsin power plant site (‘‘Port
Washington Units’’). In addition, Project
Company will develop, construct and
own a 100% interest in certain generator
interconnection equipment necessary to
interconnect the Port Washington Units
with the ATC transmission grid. W.E.
Power does not and will not own any
such facilities directly.
Wisconsin Electric requests authority
to enter into this lease transaction once
the Port Washington Units are complete.
The Project Company has entered into
two facility leases (‘‘Facility Leases’’)
with Wisconsin Electric under which
the Project Company will construct the
Port Washington Units and, upon
commencement of commercial
operation and satisfaction of certain
other conditions, will lease them to
Wisconsin Electric. The site on which
the Port Washington Units will be built
is owned by Wisconsin Electric and is
leased to the Project Company under the
ground leases. Coincident with the
commencement of the terms of the
Facility Leases, the Project Company
will sublease back to Wisconsin Electric
the real property on which the Port
Washington Units have been
constructed under the ground sublease
agreements ground Sublease
Agreements.
Wisconsin Electric will recover lease
payments in rates. Also recovered in
rates are management costs, demolition
costs and community impact mitigation
costs. Lease payments will cover
carrying costs during construction and
06MYN1
 24136 Federal Register / Vol. 70, No. 87 / Friday, May 6, 2005 / Notices
plant costs plus an allowed return on
equity during operation. The lease
payments will be further adjusted to
incorporate capital improvements the
Project Company is obligated to fund
under most circumstances.
Wisconsin Electric will make fixed
payments over the terms of the
respective Facility Leases beginning
when each Port Washington Unit
becomes operational. Each Facility
Lease will be treated as an operating
lease under regulatory accounting and
as a capital lease under generally
accepted accounting principles. Each
Facility Lease is a ‘‘net lease’’ under
which Wisconsin Electric’s obligations
to make rent payments is absolute and
unconditional.
III. Section 3(a)(1) Exemption
Wisconsin Electric requests an order
of exemption under section 3(a)(1) on
the basis that its material public utilities
are located substantially within the state
of Wisconsin and derive their operating
revenues substantially within the state
of Wisconsin.5 Wisconsin Electric states
that its out of state operating revenue
percentages for the years 2004, 2003 and
2002 respectively are 5.94%, 5.69% and
5.51%. In addition, ATC’s out-of-state
operating revenue for the years 2004,
2003 and 2002 respectively are 9.6%,
11.8% and 6.87% respectively.
Wisconsin Electric further states that all
of the operating revenue derived from
the lease of the Port Washington Units
will come from utility operations within
Wisconsin.
Ohio Valley Electric Corporation, et al.
(70–10187)
Ohio Valley Electric Corporation
(‘‘OVEC’’), 3932 U. S. Route 23, P.O.
Box 468, Piketon, OH 45661, a public
utility subsidiary owned by American
Electric Power, Inc., (‘‘AEP’’) and
FirstEnergy Corp. (‘‘FirstEnergy’’), each
a registered holding company under the
Act, and other investor-owned utilities;
and AEP MEMCo LLC, (‘‘MEMCo’’), 1
Riverside Plaza, Columbus, OH 43215, a
wholly-owned nonutility subsidiary of
AEP have filed an application under
sections 13(b) of the Act and rules 54,
90 and 91 under the Act.
OVEC and its wholly-owned
subsidiary, Indiana-Kentucky Electric
Corporation (‘‘IKEC’’), own two
generating stations located in Ohio and
Indiana with a combined electric
production capability of approximately
2,256 megawatts. OVEC is owned by
5 For a discussion of the ‘‘materiality’’ and
‘‘substantially’’ standards in the determination of
exemptions under sections 3(a)(1) and 3(a)(2), see
NIPSCO Industries, HCAR No. 26975 (February 10,
1999).
VerDate jul<14>2003 18:03 May 05, 2005 Jkt 205001
AEP, FirstEnergy and other investor-
owned utilities. The owners and their
respective ownership percentages are:
Allegheny Energy (3.5%), AEP
(39.17%), Buckeye Power Generating,
LLC (9.0%), The Cincinnati Gas &
Electric Company, a subsidiary of
Cinergy Corp. (9.0%), Columbus
Southern Power Company, a subsidiary
of AEP (4.3%), The Dayton Power and
Light Company, a subsidiary of DPL Inc.
(4.9%), Kentucky Utilities Company, a
subsidiary of E.ON AG (2.5%),
Louisville Gas and Electric Company,
also a subsidiary of E.ON AG (5.63%),
Ohio Edison Company, a subsidiary of
FirstEnergy (16.5%), Southern Indiana
Gas and Electric Company, a subsidiary
of Vectren Corporation (1.5%), and The
Toledo Edison Company, also a
subsidiary of FirstEnergy (4.0%). These
entities or their affiliates (collectively,
‘‘Sponsoring Companies’’) purchase
power from OVEC.
OVEC was formed in the early 1950s
by a group of holding companies and
utilities located in the Ohio Valley
region in response to the request of the
United States Atomic Energy
Commission (‘‘AEC’’) to supply the
electric power and energy necessary to
meet the needs of a uranium enrichment
plant being built by AEC in Pikes
County, Ohio. The Department of
Energy (‘‘DOE’’) subsequently became
the successor to AEC.
OVEC owns two coal-fired generating
stations: (i) The Kyger Creek Plant in
Cheshire, Ohio, which has a generating
capacity of 1,075 megawatts, and (ii) the
Clifty Creek Plant in Madison, Indiana,
which has a generating capacity of 1,290
megawatts and is owned by OVEC’s
wholly-owned subsidiary, IKEC. Upon
its formation, OVEC entered into two
power sales agreements: (i) The DOE
power agreement between OVEC and
the United States (through the DOE) and
(ii) the inter-company power agreement
among OVEC and the Sponsoring
Companies. Each of the Sponsoring
Companies is either an owner of OVEC’s
stock or an affiliate of an owner. Under
the power agreement with the United
States, the DOE was entitled to
essentially all of the generating capacity
of OVEC’s generating facilities. The
Sponsoring Companies were granted
certain rights to surplus energy not
needed to service the DOEs Ohio
enrichment facility. The DOE
terminated its power agreement as of
April 30, 2003. As a result, each of the
Sponsoring Companies is currently
entitled to its specified share of all net
power and energy produced by OVEC’s
two generating stations, and the
Sponsoring Companies are required to
pay their share of all of OVEC’s costs
PO 00000 Frm 00176 Fmt 4703 Sfmt 4703 E:\FR\FM\06MYN1.SGM
resulting from the ownership, operation
and maintenance of its generating and
transmission facilities, except those
costs that were paid by the DOE.
MEMCo is an inland marine
transporter operating approximately
1,700 barges and 40 towboats on the
Ohio, Mississippi and Illinois Rivers
and along the inter-coastal canal of the
Gulf Coast. In addition to other services,
MEMCo provides barge transportation
services to associates and non-affiliated
companies.
OVEC states that the operation of
OVEC’s generating stations require the
movement and storage of substantial
quantities of coal to ensure the
availability of power to its customers,
and that barging has been, and
continues to be, the cheapest mode of
transporting bulk commodities such as
coal.
OVEC and IKEC were under contract
for barge services from American
Commercial Barge Line, LLC (‘‘ACBL’’)
through December 31, 2003. ACBL
declared bankruptcy in January, 2003,
and MEMCo began providing barge
services to OVEC and IKEC at cost in
March 2003 pursuant to rule 87(b)(2).
MEMCo continued to provide services
while OVEC and IKEC solicited bids for
barge services from several non-
affiliates, as well as MEMCo. MEMCo’s
bid at cost was lower than bids received
from non-affiliates. Accordingly,
MEMCo seeks approval in this filing to
provide barge services to OVEC and
IKEC at cost in accordance with rules 90
and 91.
National Grid Transco plc (70–10295)
National Grid Transco plc (‘‘NGT’’),
1–3 Strand, London WC2N 5EH, United
Kingdom, a foreign registered holding
company, has filed a declaration
(‘‘Declaration’’) under sections 6(a)(2),
12(c) and 12(e) of the Act and rules 42,
62 and 65 under the Act.
By the Declaration, NGT requests
various authorizations relating to the
issuance and repurchase of certain
preferred securities it would issue to
effect a return of cash. The company
also seeks authority to solicit
shareholder consents in connection
with these transactions.
I. The NGT System
NGT’s ordinary shares are listed on
the London Stock Exchange, and its
American Depositary Receipts (‘‘ADRs’’)
are listed on the New York Stock
Exchange.
A. Domestic Operations
NGT’s U.S. business is conducted
through National Grid USA, a registered
holding company and an indirect
06MYN1
 Federal Register / Vol. 70, No. 87 / Friday, May 6, 2005 / Notices
wholly-owned subsidiary of NGT.
National Grid USA is held directly and
indirectly by several intermediate
registered holding companies. The
National Grid USA group of companies
includes five wholly-owned electricity
distribution companies: Niagara
Mohawk Power Corporation,
Massachusetts Electric Company, The
Narragansett Electric Company, Granite
State Electric Company, and Nantucket
Electric Company; and four other utility
companies: New England Power
Company, New England Electric
Transmission Corporation, New
England Hydro-Transmission
Corporation and New England Hydro-
Transmission Electric Company, Inc.
Through these subsidiaries, National
Grid USA provides electric transmission
and distribution services to residential,
commercial, and industrial customers in
New England and the transmission and
distribution of electricity and the
distribution of natural gas to residential,
commercial, and industrial customers in
New York.6
In addition, other companies within
the National Grid USA group: (1)
Provide metering, billing, and customer
services; manage, design and build
transmission and distribution-related
facilities; and (3) provide related
products and services including energy
efficiency programs for customers.
B. Foreign Operations
Through its direct wholly-owned
subsidiary, National Grid Holdings One
plc (‘‘NGH One’’), and that company’s
subsidiary, National Grid Holdings
Limited, NGT owns The National Grid
Company plc (‘‘NGC’’) and certain other
non-U.S. subsidiaries. NGC is engaged
in the transmission of electricity in
England and Wales. NGC owns and
operates a transmission system
consisting of approximately 4,500 route
miles of overhead lines and
approximately 410 route miles of
underground cable together with
approximately 340 substations at some
240 sites.
Through NGH One, its subsidiary
Lattice Group plc (‘‘Lattice Group’’), and
its subsidiary Transco Holdings plc,
NGT owns Transco plc (‘‘Transco’’) and
certain other non-U.S. subsidiaries.
Transco is the owner and operator of the
majority of Great Britain’s gas
transportation and distribution system.
Transco’s transportation network
comprises approximately 4,200 miles of
6 Collectively, National Grid USA’s electric utility
subsidiaries own and operate approximately 76,000
miles of transmission and distribution lines in New
York and New England and deliver electricity to
approximately 3.3 million customers in New York,
Massachusetts, Rhode Island and New Hampshire.
VerDate jul<14>2003 18:03 May 05, 2005 Jkt 205001 PO 00000
high pressure national transmission
pipelines and approximately 170,000
miles of lower pressure regional
transmission and distribution systems
pipelines. Gas is transported on behalf
of approximately 70 ‘‘shippers’’ either to
consumers or third party pipeline
systems. Transco receives gas from
several coastal reception terminals,
storage sites, and onshore fields around
Great Britain. An interconnector to
Belgium links Transco’s own gas
transportation system to continental
Europe. A second interconnector
supplies gas to Eire and Northern
Ireland. In addition, Transco is
responsible for the safety, development
and maintenance of the transportation
and distribution system. The company,
however, does not sell gas to consumers.
C. Foreign Assets Sale
On August 31, 2004, NGT announced
the sale of four U.K. gas distribution
networks for £5.8 billion in cash plus
approximately £130 million of assumed
liabilities. The transactions are subject
to certain regulatory consents and
approvals including from the U.K. Gas
and Electricity Markets Authority, the
U.K. Department for Trade and Industry
and the U.K. Health and Safety
Executive. The Office of Gas and
Electricity Markets has issued a detailed
timetable that outlines the consent and
approvals process, and NGT aims to
complete these transactions during the
summer of 2005. Completion of the
transactions is also subject to
termination rights, exercisable by each
of NGT and the purchasers, in the event
of defined circumstances arising which
would have a material adverse impact
on the distribution networks being sold.
NGT has indicated that it would
provide a one-time return of cash to its
shareholders of £2.0 billion from the
proceeds of the distribution networks
sales. It is expected that the profit from
the sale will be significantly in excess
of the amount being distributed to
shareholders.
D. Return of Cash
More specifically, NGT intends to
return cash to its shareholders through
a mechanism described below involving
a pro rata issuance of preferred stock
referred to as ‘‘B shares.’’ According to
NGT, this method would afford its
shareholders choices as to the form and
timing of the receipt of funds. NGT
would use its share premium account to
issue the B shares to existing holders of
NGT’s ordinary shares following
shareholder approval at an
Extraordinary General Meeting (‘‘EGM’’)
currently scheduled for July 25, 2005.
Frm 00177 Fmt 4703 Sfmt 4703 E:\FR\FM\06MYN1.SGM
24137
NGT’s issuance of B shares would be
accompanied by a share consolidation
(i.e., a reverse stock split). Shareholders
would receive a reduced number of new
NGT ordinary shares to replace their
existing shares according to a ratio that
would be set prior to the EGM. The ratio
would be set using the trading price of
NGT’s shares immediately before
announcement of the details of the
transaction and would be designed so
that, subject to normal market
movements, the share price of the new
shares immediately after the £2.0 billion
distribution would be approximately
equal to the share price of the existing
shares immediately beforehand.7 The
priorities, preferences, voting rights and
other terms of the NGT ordinary shares
would not change as a consequence of
the share consolidation.
The B shares would rank ahead of the
ordinary shares for the payment of
dividends and in liquidation and would
vote only with respect to matters
directly affecting the B share class.
Shareholders would receive one B share
for every ordinary share that they hold.
Holders of NGT ADRs, which represent
five NGT ordinary shares, would receive
five B shares per ADR.
The B shares would be listed on the
London Stock Exchange.8 B share
owners could elect to: (1) receive a
dividend of 65 pence per share
(‘‘Income Election’’) shortly after the
EGM; (2) sell their shares for 65 pence
per share (‘‘Initial Capital Election’’)
shortly after the EGM; or (3) hold their
shares and wait (a) to sell their shares
for 65 pence per share at a later date
(‘‘Deferred Capital Election’’); or (b)
until NGT converts them into new NGT
ordinary shares (‘‘Final Maturity
Election’’). Shareholders that do not
affirmatively make an election will be
deemed to have selected the Income
Election.
1. Income Elections. Shareholders
choosing Income Elections would have
all of their B shares converted into
‘‘deferred shares’’ with no voting rights
and negligible value once the dividend
is paid. NGT may repurchase all
deferred shares in existence at any time
for the aggregate consideration of one
7 NGT states that, if it did not combine the B share
issuance with the consolidation, the value of its
ordinary shares would, all things being equal, be
expected to decrease by 65 pence per share
immediately after the distribution, and NGT’s per
share financial ratios would also be affected. The
company also states that the share consolidation
would help to maintain a consistent and less
confusing presentation of per share information to
the financial markets.
8 These securities would not be listed on any
securities exchange or quoted on an inter-dealer
quotation system in the U.S.
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 24138 Federal Register / Vol. 70, No. 87 / Friday, May 6, 2005 / Notices
pence, and then cancel those
repurchased shares.
2. Capital Elections. Under the
repurchase options, JPMorgan Cazenove
Limited (‘‘JPMorgan Cazenove’’) would
offer to buy B shares for 65 pence per
share, free of all dealing expenses and
commissions. The Initial Capital
Election would occur shortly after the
EGM. At present, NGT expects that
JPMorgan Cazenove would offer
Deferred Capital Elections in 2006 and
2007.
Following completion of any
repurchase offer, JPMorgan Cazenove
would have the right to require NGT to
purchase at 65 pence per B share, those
B shares purchased from shareholders
pursuant to JPMorgan Cazenove’s
repurchase offer. All B shares
repurchased by NGT from JPMorgan
Cazenove would be cancelled, and
would not be held as treasury shares.
Those shareholders electing to hold
their B shares for a period of time
(including those that select the Final
Maturity Election, described below)
would be entitled to a dividend on the
B shares at a rate per annum of 75% of
12-month Sterling London Inter-Bank
Offer Rate on a value of 65 pence per B
share (‘‘Continuing Dividend’’).
3. Final Maturity Elections. Under the
terms and conditions of the B shares,
NGT would convert all of the B shares
outstanding after a certain date in 2007
(specified in the proxy materials) into
ordinary shares. The conversion ratio
would be one new ordinary share for
every M/65 B shares, where M
represents the average of the closing
mid-market quotations in pence of the
new ordinary shares on the London
Stock Exchange, as derived from the
Daily Official List (as maintained by the
UK Listing Authority for the purposes of
the Financial Services and Markets Act
2000, as amended) for the five business
days immediately preceding the
conversion date), fractional entitlements
being disregarded and the balance of
those shares (including any fractions)
shall be deferred shares as described in
the proxy materials. Conversions of the
B shares would be effected by NGT
through a reorganization of share capital
that would result in the elimination of
the B shares though their conversion
into ordinary shares.
II. Proposed Transactions
NGT requests authority under section
12(c) and rule 42 to acquire, retire,
redeem and/or convert the B shares in
connection with Initial Capital
Elections, Deferred Capital Elections
VerDate jul<14>2003 18:03 May 05, 2005 Jkt 205001
and Final Maturity Elections.9 The
company also requests authority under
section 6(a)(2) to effect the intended
reverse stock split. Further, NGT
requests authority to solicit shareholder
consents with regard to the B share
scheme under section 12(e) and rules 62
and 65. NGT states that it already has
the necessary authority to issue the B
shares.10
For the Commission, by the Division of
Investment Management, pursuant to
delegated authority.
J. Lynn Taylor,
Assistant Secretary.
[FR Doc. E5–2198 Filed 5–5–05; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–51634; File No. SR–Amex–
2005–036]
Self-Regulatory Organizations;
American Stock Exchange LLC; Notice
of Filing and Order Granting
Accelerated Approval of a Proposed
Rule Change Relating to the Listing
and Trading of Notes Linked to the
Performance of the CBOE S&P 500
BuyWrite Index(sm)
April 29, 2005.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2
notice is hereby given that on March 25,
2005, the American Stock Exchange LLC
(‘‘Amex’’ or ‘‘Exchange’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I and II
below, which Items have been prepared
by the Exchange. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons and is
9 Not all sellers of B shares would be unaffiliated
with NGT, so those repurchases would not be
exempt under rule 42.
10 Economically, the issuance of B shares
constitutes a dividend. This dividend, however,
would not be subject to section 12(c) of the Act or
rule 46 because it would be paid out of NGT’s
‘‘distributable reserves,’’ which is generally
equivalent to unrestricted retained earnings under
U.S. GAAP. The issuance of B shares would be
subject to sections 6 and 7 of the Act. NGT,
however, is authorized through September 30, 2007
to issue various types of securities, including
preferred stock and securities convertible into
common stock, subject to certain conditions. See
HCAR No. 27898 (September 30, 2004) (‘‘Financing
Order’’). NGT states that the B shares issuance
would comply with all of the conditions of the
Financing Order.
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
PO 00000 Frm 00178 Fmt 4703 Sfmt 4703 E:\FR\FM\06MYN1.SGM
approving the proposal on an
accelerated basis.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to list and
trade notes, the performance of which is
linked to the S&P 500 BuyWrite
Index(sm) (the ‘‘BXM Index’’ or
‘‘Index’’). The text of the proposed rule
change is available on the Amex’s Web
site (http://www.amex.com), at the
principal offices of the Amex, and at the
Commission’s Public Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Amex included statements concerning
the purpose of, and basis for, the
proposed rule change and discussed any
comments it received on the proposed
rule change. The text of these statements
may be examined at the places specified
in Item III below. The Amex has
prepared summaries, set forth in
Sections A, B and C below, of the most
significant aspects of such statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
Under Section 107A of the Amex
Company Guide (‘‘Company Guide’’),
the Exchange may approve for listing
and trading securities that cannot be
readily categorized under the listing
criteria for common and preferred
stocks, bonds, debentures, or warrants.3
The Amex proposes to list for trading
under Section 107A of the Company
Guide notes linked to the performance
of the BXM Index (the ‘‘Notes’’). The
BXM Index is determined, calculated
and maintained solely by the Chicago
Board Options Exchange, Inc.
(‘‘CBOE’’).4 Wachovia Corporation
3 See Securities Exchange Act Release No. 27753
(Mar. 1, 1990), 55 FR 8626 (Mar. 8, 1990) (order
approving File No. SR–Amex–89–29).
4 If the CBOE discontinues publication of the
Index and the CBOE or another entity publishes a
successor or substitute index that the calculation
agent determines, in its sole discretion, to be
comparable to the Index (a ‘‘Successor Index’’), then
the calculation agent shall substitute the Successor
Index as calculated by the CBOE or any other entity
for the Index and calculate the Redemption Amount
(as defined below) by reference to the Successor
Index. Telephone conversation between Jeffrey P.
Burns, Associate General Counsel, Amex, Florence
Harmon, Senior Special Counsel, Division of
Market Regulation (‘‘Division’’), Commission, and
David Liu, Attorney, Division, Commission, on
April 26, 2005. In the event that the CBOE
discontinues publication of the Index and (a) the
06MYN1